Mr Abbott’s government has promised to lift foreign investment limits by changing the Qantas Sale Act but that change is opposed by Labor, which supports a national carrier and favours providing a debt guarantee. On Sunday, Mr Abbott said the government was working to the Sale Act “which does put a ball and chain around Qantas’s ankles” but on the debt guarantee the Prime Minister said it was “not the job of government to play favourites between particular businesses”.

“If you offer it to Qantas, you’ve got to offer it to Virgin, you’ve got to offer it to Rex and indeed to any other airlines that put their hand up,” he told the The Bolt Report.

He said it was unlikely that the airline would fail as a result.

“I think there are difficulties obviously; there are difficulties that all airlines are facing. Qantas is under pressure from a nimble and aggressive competitor – that’s the problem that Qantas has.

“The lesson which I hope people are learning is that it is not the government’s job to prop up individual businesses; it is the government’s job to try to ensure that the overall economy is strong,” Mr Abbott said.

The Greens will move for an urgent Senate inquiry on Monday into how the government can ensure Qantas remains a viable national carrier.

“It is becoming clearer by the day that Tony Abbott has no plan for Qantas, beyond selling it off to a government-backed overseas airline,” Green deputy leader Adam Bandt said.

Jetstar a ‘basket case’

Independent senator Nick Xenophon repeated calls for a judicial inquiry into the Qantas group, saying that its discount carrier Jetstar was a “black box” and a “basket case”.

“Before you look at changing one comma of the Qantas Sale Act, get Qantas to open its books and have some forensic accountants look at it,” he said on Sunday.

Senator Xenophon opposed a debt guarantee for the airline until the government takes a forensic look at the Qantas group.

“If there is evidence of unfair competition that is something the Australian government should deal with.”

“Unions call on the Abbott government to support these workers by providing Qantas with a debt guarantee subject to a commitment from Qantas to protect workers against job losses, and on the airline demonstrating they have a sustainable long-term business plan which is not reliant on a spiral of job cuts,” he said in a statement on Sunday.

Federal secretary of the Australian Licensed Aircraft Engineers Association Steve Purvinas said on Sunday that his members were willing to consider trade-offs for wage rises, when wage agreements expired later this year.

“Strike action was never on our radar, we have a wage agreement that expires at the end of the year. Negotiations will kick off in September or so and we will have to sit down with Qantas and see what they’ve put on the table.”

Wages for shares possible

He said the union may be prepared to trade off wage rises for shareholdings in the company.

“We are absolutely prepared to negotiate,” he told Sky News Agenda.

Mr Purvinas repeated criticism of the airline’s board, which includes “not one person with an aviation background” and of management’s strategy.

He criticised management decisions to: buy the new A380 and Dreamliner planes - “everyone knows you never buy the model A of anything”; fly old 747-400s from Sydney to Dallas - “when they know the headwinds won’t let the aircraft fly the distance”; and its insistence on maintaining 65 per cent domestic market share – “Qantas were making quite healthy profits when Ansett was flying and they had 51 per cent market share”.

Labor’s employment spokesman Brendan O’Connor called on the government to release details of its plan to change the foreign ownership limits.

“I think that we can have a company that is owned by Australians. We’re no different to other countries. What we have said is we will look at those proposed change by the government in relation to the Sale Act to see if we can accept some of them, but why would you go first to allowing state-owned enterprises to own the company, I don’t think that is necessary.”